How to Negotiate with Credit Card Providers

When you’re using a credit card, sometimes it’s easy to think of yourself as shackled to your credit card company, especially if you’re carrying a balance. Remember, though, that credit cards are a business, and you are a customer. Credit card companies will do what they can to earn as much money as possible, whether that means bending the rules and lowering your fees to keep your business, or settling your debt for an amount you can reasonably pay. If you want your credit card experience to be better, you can negotiate with credit card providers on a surprising number of things, like your APR, and many will be receptive to hearing how they can meet your needs better. To learn more about how you can negotiate with credit card issuers, read on.

What can you negotiate for?

A lot of people already know that you can negotiate with credit card companies to settle debt, but perhaps unsurprisingly, that’s the hardest thing you can negotiate for. It’s much easier to convince card companies to give you benefits, partly because they’re smaller requests and partly because you’re more likely to be negotiating from a position of strength. Small conveniences, such as changing your payment due date to line up better with your income schedule, are generally simple to get, but you can even ask for lower interest rates or for reductions in fees. Just calling your credit card’s customer service line (using the number located on the back of your card) and asking can potentially help you get a late fee eliminated, or get your card’s annual fee waived for a year. If you have a joint credit card, keep in mind that some requests, such as raising your card’s credit limit, may require all of the joint account holders to give their permission (or agree to a credit inquiry) before the credit card provider will accept them.

Negotiating lower fees and perks

When you negotiate with credit card companies about lowering your fees or giving you bonuses, you’re essentially telling them what it will take for you to remain satisfied as a customer. Doing research on other credit cards can help here, as you can reference those card offers to gain leverage for your own requests. For instance, asking your credit card issuer to lower your annual fee just because you want to pay less isn’t the most compelling argument, but asking for a lower annual fee to beat an offer from a competitor gives the company more reason to act. You can also bring up your own virtues as a customer to back up your side, like mentioning how rarely you miss your payment due dates in order to get a late fee removed, or stating how many years you’ve been a cardholder to demonstrate your customer loyalty. However, note that this can backfire if you don’t have the best customer history. A credit card company isn’t likely to remove a late fee from your account if you consistently pay your bill late, for example.

Negotiating debt

Negotiating debt is very different from negotiating extra benefits for a number of reasons. First, your ability to walk away from the negotiation and take your business elsewhere is drastically limited, because you’re legally obligated to pay the debt you owe to the credit card company. Second, while it generally can’t hurt to ask a credit card company for a discount or bonuses, just bringing up debt negotiation can have consequences. Many credit card issuers will immediately cut off your credit if you indicate to them that you’ll have trouble paying what you owe, so you should only broach the topic when you’re sure it’s what you want to do. Finally, negotiating your debt with a credit card issuer will most likely affect your credit scores, but you don’t know to what degree, because credit card providers can all report credit events differently, and the credit scoring system is difficult to predict.

Since settling your debt for less than what you owe is a rather extreme solution (think of it as one notch below declaring bankruptcy), you should first try to work out a payment plan with your credit card company. Proposing a payment structure that you can realistically meet will help you show the company that you’re serious about paying your debt, and if you have savings to make some kind of down payment, then that’s even better. Alternatively, if you are suffering from some temporary hardship and you know when you’ll be able to resume making normal payments, you can ask the credit card company for a forbearance. This can lower interest rates, suspend late fees and possibly let you skip payments for a few months until you can pay again, effectively giving you a break on your debt. If you are determined to settle your debt, know that the credit card company may ask for some kind of proof that your finances are so depleted that you need to settle, and the settlement will cause significant damage to your credit scores. Before you go this route, it may be wise to speak with a credit counselor about your plan.

No matter which option you go with for negotiating, always keep detailed records of the dates and times that you called, who you spoke with and what they said, and ask them to send any agreement you come to in writing.

As a final tip, when you call to negotiate with credit card companies, try to remain calm and polite. Customer service workers are people too, and they’ll probably be more willing to help you if you treat them with respect. For more on how you can get the most out of your cards, follow our credit cards blog.

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About Author

Gabriel Wood

Gabriel Wood is a personal finance and technology writer for NextAdvisor.com, covering personal and small business loans, VoIP, and Internet fax services. He is a graduate of American University in Washington D.C., and currently lives in Oakland. Follow him on Twitter @GabrielAdvisor.

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